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ARE NON-PROFITS PROFITABLE? ASK FRANKLIN GRAHAM

"All that we call human history–money, poverty, ambition, war, prostitution, classes, empires, slavery–[is] the long terrible story of man trying to find something other than God which will make him happy.

“Why are salaries so high?” Answer: “Corporations often say CEO pay is so high to retain talent that would otherwise be recruited away,” according to article. The next to last sentence is as follows:

“The biggest compensation gainer among top executives was Franklin Graham of the Billy Graham Evangelistic Association, whose compensation rose 534% to $633,722, much of the gain because of a $366,000 retirement payment. Graham, 57, son of Billy Graham, also earns $483,000 as CEO of charity Samaritan’s Purse.”

The Charlotte Observer, which is based in the same city as the Billy Graham Evangelistic Association (BGEA), featured an article on October 8, 2009, with this headline: “Graham’s 2 CEO posts boost pay, draw critics: Charity watchdogs question the evangelist’s $1.2 million in compensation last year.”

“As president of the Billy Graham Evangelistic Association and Samaritan’s Purse, he receives two full-time salaries and two retirement packages. Last year, his total compensation from the two ministries was $1.2 million.

The size of Graham’s total 2008 compensation $535,000 from Samaritan’s Purse and $669,000 from Charlotte-based BGEA – drew questions from nonprofit experts interviewed by the Observer. They doubted that one person – even the energetic globe-trotting Graham – can do two full-time jobs leading organizations that employ hundreds and spend hundreds of millions around the world.

As head of the Boone-based Samaritan’s Purse, Graham earned more last year than any other leading international relief agency based in the United States. That includes eight with larger budgets, according to data compiled by Guidestar, a group that monitors nonprofits.”

During these recessionary times, this kind of publicity doesn’t bode well for these two Christian organizations. After all, Franklin Graham’s livelihood depends on the charity of donors who likely have had to tighten their personal budgets during the past year. According to The News and Observer, sister newspaper of The Charlotte Observer (both are owned by McClatchy), “Graham acknowledged last week that his compensation total ‘looks terrible’ and ‘that people won’t understand it’. News of his pay increase comes only months after BGEA laid off more than 10 percent of its staff.”

Graham and his two boards of directors explained to reporters that accelerated contributions to his retirement were primarily responsible for the salary increase. The Charlotte Observer reported that:

“Graham received no retirement his first five-plus years at Samaritan’s Purse and first year at the BGEA. The boards said they were playing catch-up and hoping to satisfy his goal of working for free when he reaches age 70.

In addition, Graham and the boards said, nearly half of what he received last year from BGEA – $300,000 – was deferred retirement money that had been committed and reported over three previous years. Under new IRS rules, which have affected other nonprofit CEO’s, the money had to be reported as a lump sum in 2008, the year Graham became eligible for the money.

Even with that $300,000 – plus accrued interest – taken out, Graham’s compensation at BGEA rose 21 percent in 2008, from $250,000 to $303,000. The median increase for CEOs at the nation’s biggest charities in 2008 was 7 percent, according to an annual survey released last week by the Journal of Philanthropy.”

As you might imagine, the press is having a field day reporting Graham’s exorbitant salary. Now that the media spotlight is on Franklin Graham, he has asked that the heads of the two ministries’ compensation committees stop making contributions to his retirement plan “for the time being”.

The Charlotte Observer article cited above includes this important point with which we both agree:

“Some charity watchers said they know of no other instance where one person leads two such large organizations. And they wondered whether it was possible to effectively do so.”

A reporter from The Charlotte Observer asked Graham how he juggles these two positions, to which Graham responded: “You work a little bit all the time. It’s not a 9-to-5 job.”

Let’s see … there are 168 hours in a week. Assuming that CEO’s of nonprofits devote a minimum of 50 hours per week to their position (which they should be doing for their HUGE salaries), that’s 100 hours per week Graham should be spending as CEO of two large organizations. He is left with 68 uncommitted hours per week. If he gets an average of 6 hours sleep per night (42 hours total), he has 26 hours left per week. If Franklin spends a total of 1 hour per day eating three meals (20 minutes per meal) and 30 minutes per day showering and grooming, he is left with about 16 hours PER WEEK for personal time which would include reading, talking, spending time with his wife, checking on his father, watching television, surfing the internet, and visits to the W.C. (water closet, as they say in Europe), among other things. 16 divided by 7 leaves a whopping 2.3 hours per day for these activities. Does that sound realistic?

Since we’re focusing on money in this post, the bottom line for us is our Christian witness. What kind of message does this send to a watching world? We acknowledge that IRS reporting inflated Graham’s salary last year, but that’s just a small portion of what he earned.

In Franklin Graham’s interview with The Charlotte Observer last week, he told the reporter that money is not what drives him. The spotlight is now on Graham, and it will be interesting to see whether he puts his money where his mouth is.

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